The Self-Employment Income Support Scheme allows those who qualify to claim a grant of 80% of their average monthly trading profits.
It is paid out in a single instalment ‒ so the equivalent of getting three months’ worth of money in one go ‒ and is capped at a total of £7,500.
The grant is taxable, so you’ll still pay Income Tax and National Insurance on the money received.
You can still work, start a new trade, or take on other employment if you receive the grant.
When will the grant be paid?
The claims service opens on 13 May.
According to HMRC, payments will be made to successful claimants’ bank accounts within six working days after the claim is made.
The Self-Employment Income Support Scheme has been set up to support people who have been adversely affected by the COVID-19 pandemic.
There are all sorts of circumstances where this may apply. For example, you may be shielding, have caring responsibilities due to the pandemic, or may have had to take on less work as you now have fewer clients.
But it isn’t open to all self-employed workers ‒ you need to meet the following criteria:
- You traded in the tax year 2018/19 and submitted your self-assessment tax return on or before 23 April 2020 for that year
- You traded in the tax year 2019/20
- You intend to continue to trade in the 2020/21 tax year
- Your trading profits are no more than £50,000 and are at least equal to your non-trading income
On this final point, HMRC says it will look at your average trading profit over the last three tax years.
If that average comes to less than £50,000, then you may be eligible for the grant, which will then be paid into your bank account.